Written by: Christian Gonzalez-Rivera

Christian González-Rivera
Research Program Coordinator
Tel.: 510-926-4020

Today, the Greenlining Institute issued its annual report card ranking the performance of top financial institutions in SBA lending to minority entrepreneurs. The findings are based on the verified data for fiscal year 2007 provided to Greenlining by the SBA through a Freedom of Information Act request.

Greenlining produces this study due to the SBA’s refusal to conduct their own analysis of SBA lending to minorities. It is intended to encourage competition among the top SBA loan-originating banks in the nation, which we define as those banks with more than $50 billion in assets and that originate more than 200 SBA loans per year.

Only Citibank received an “A” grade in percent of SBA loans originated to all minorities: Three banks received “F” grades in this category: Key Bank, Capital One and Fifth Third Bancorp.

The report also ranks the banks in lending to African Americans, Asian Americans, and Latinos. Alarmingly, only one bank scored above a “C+” in percent of loans to African Americans. Bank of America was the top bank in this category, at 13% of all SBA loans for fiscal year 2007. This was the only bank to originate more than 10% of its loans to African Americans.

Citibank originated the largest percent of loans to Asian Americans, at 30%, receiving a grade of A+. Citibank was also the leader in percent of loans to Latinos, at 19.4%, and received a grade of “A.” For more data highlights, please see attached issue brief.

In response to these findings, Darlene Mar, Chair of the Council of Asian American Business Associations commented, “Citibank is to be commended for having the best percentage of SBA loans to Asian Americans. We are perplexed that Citibank’s percentage is three times better than that of Wachovia and almost three times higher than both Washington Mutual and HSBC.”

In response to the findings on Latinos, David Lizárraga, Chair of the National Hispanic Chamber of Commerce said, “The SBA budget should be doubled. The number of minorities served should be doubled or tripled, and no financial institution should be making less than 20% of its SBA loans to Latinos.”

The Greenlining Institute strongly urges the major financial institutions to set a goal of originating 60% of their SBA loans to minority entrepreneurs. If the banks were to meet this goal, it would double the number of SBA loans to minority-owned small business in the United States .